10 Ways Cloud Computing Will Disrupt our Businesses in 2012

If anything, 2011 should be remembered as the "Year of the Cloud." The past year was an energizing one in terms of the advancement of cloud computing. The cloud approach was adopted by many organizations, and most vendors have now gotten into the game as well. What will 2012 bring? A possible motto for the upcoming year may be "Cloud First; But Show Me the Money." Cloud will become simply be the accepted way of acquiring IT services and new applications. However, companies are tight with their IT budgets and want to see the value -- and the pass that cloud has received because it has been so new and different is wearing off.

As we wrap up the year, it's time to take a look ahead at what 2012 will bring:

1) “Cloud” will begin to fade as a differentiating term -- because it will just be the way we do things We're now getting to the point where cloud is being simply accepted as the delivery platform for applications and services. Cloud will keep on coming on stronger than ever before, but, ironically, it may also soon begin to seem more ho-hum and routine than a grand paradigm shift. Expect to see vendors this year begin to recognize this ho-hum factor and move on to new buzzwords.

2) Many businesses will follow the federal government's example of a “cloud-first” policy. Last year, as part of its effort to streamline its $80-billion-a-year-plus IT budget, the government decreed that all agencies consider "cloud-first" options where feasible. Recognizing the wisdom of such an effort, and seeing it succeed on such a massive scale, companies will adopt their own cloud-first approaches when considering new systems purchases.

3) Pressure will grow to demonstrate cloud ROI. Companies may increasingly opt for cloud-first options, but that won't take away the relentless pressure to demonstrate quick returns on investment. The traditional IT world has been feeling this heat for more than a decade now, and to date, cloud approaches, because they're so new and game-changing, have gotten a pass. As cloud becomes a normal, accepted part of operations, it will come under greater scrutiny. Part of the calculation will need to include business continuity provisions -- the Amazon Web Services outage last spring showed that too much reliance may have its price. The bottom line is that cloud needs to be implemented for business value, not just for the sake of having a cloud. and in many cases, cloud may not even be the most effective approach.

4) Private clouds will proliferate faster than public clouds. Many companies -- especially those with significant IT infrastructures or sensitive data assets -- are finding it worthwhile to adopt the cloud model to deliver their own internal applications as a service. As virtualization increases across enterprises, opportunities for private cloud creation will grow as well. Internal applications will be delivered via cloud services exclusive to the business.

5) Private cloud will elevate IT's role in the business. Organizations not only rely on information technology to operate on a day-to-day basis, but also see it as their key strategy for growth in a hyper-competitive global economy. While they may be spending less time managing their own IT infrastructure, IT executives and managers are being called upon to advise and guide their organizations into this new realm. Part of the new IT value proposition may be to oversee the business's growth as a cloud provider itself -- even though it may have been a non-IT type of business before.

6) IT departments will both act as facilitators and competitors to public cloud providers. Organizations now have choices as to where to purchase IT services -- either from their own IT departments, or from outside providers. While many IT executives will assume roles as objective advisers on such decisions, their own departments will need to provide good business cases as to why their services are more cost-effective and provide greater value than that of an outside service provider. Many companies will use a mix of outside and internal IT services, and IT departments will need to compete for that business. It's not too far-fetched, however, to see some IT departments offering services outside their business.

7) Lines between service providers and consumers will blur – on many cases, companies will be both. Related to the rise of private clouds will be the fact that many companies -- and individuals as well -- will be building and offering their own services to the world. We're already seeing a lot of this happening with the app store model, in which software publishers can draw sizable revenues by publishing apps in the cloud.

8 ) Public clouds will increasingly be seen as more secure than on-premises systems. While data security has been seen as the major challenge to external cloud engagements, there's a good case now to be made that data may be more secure with an outside provider. A few months back, I spoke with a CIO who admitted that he felt his data is probably in better hands with a well-trained, SAS-70 compliant cloud provider than trying to keep his own systems and staff up to date with security procedures and protocols.

9) Economic growth will accelerate as more businesses are formed in the cloud. Let’s face it, there’s no point in investing $50,000 or more in servers and software when everything you need is right in the cloud. The availability of cheap -- and sometimes even free -- cloud computing resources may be laying the groundwork for a startup boom, the likes we have never seen before. Designing new products, without the need to go through corporate finance and IT approvals definitely is a great way to instill entrepreneurial spirit.

10) Cloud will disrupt the outsourcing model. As more enterprises adopt service-oriented architecture principals and practices, outsourcing may become an easier, more manageable option. At the same time, there will be fewer multi-million-dollar deals in which entire IT operations are handed over to outsourcers. A more modularized form of outsourcing will take root because the growing standardization and "hot-swappability" of cloud services and components makes it easier to outsource pieces of the IT infrastructure. This may make outsourcing less of the onerous either/or business decision it has been, as chunks of applications or services can be outsourced or brought in house as the situation fits, with minimal disruption to IT operations and priorities. As a result, we'll see more "micro-outsourcing" and less big-ticket-turn-the-whole-operation-over types of deals. Plus, cloud is lowering the barrier of entry for outsourcing providers, which will in turn multiply their numbers, heightening competition and lowering prices. If anything, this will energize the outsourcing market.

I am an author, independent researcher and speaker exploring innovation, information technology trends and markets. I am also a co-author of the SOA Manifesto, which outlines the values and guiding principles of service orientation in business and IT. I served on the organi...